Controlling spending versus raising taxes

Property tax relief is the number one priority Nebraskans share with me as I travel the state. From homeowners to farm families, I hear stories from Nebraskans about how the 11th highest property taxes in the nation are impacting them financially and continue to rise.

Each year I have been Governor, we have worked on property tax relief. Together, the Legislature and I have delivered over $840 million in property tax relief over the past four years. In 2018, local governments levied about $4 billion in property taxes. At the same time, the state budget provided a record-setting $2 billion in combined state aid to local governments and property tax relief, or about half of the local property tax burden. We have delivered this aid and relief by controlling state spending and without increasing state taxes. By keeping state spending below state revenues, we have been able to return the difference to taxpayers.

This year, there are two basic approaches to property tax policy being considered by the Legislature. One is controlling state and local spending to slow the growth of government and reduce the property tax burden. The second is raising state taxes to offset local taxes, which does not control spending and will result in bigger government.

On tax policy, I am taking the approach of controlling spending. Senator Linehan and I have teamed up to make structural changes to Nebraska’s property tax system. We are proposing to establish a three percent cap on the growth of property taxes levied by local governments. Our proposal comes in the form of a constitutional amendment, which the people of Nebraska will vote on after the Legislature passes it. This approach brings much-needed structural reform to the current property tax system. Right now, local governments have no limit on how much additional property tax they can take from property owners. With about 2,500 units of local government in Nebraska, a limit on property tax increases will bring structural relief and more transparency to property taxes. If local governments feel that they need more than a three percent increase, they can go to the taxpayers and ask them to vote for it on the ballot.

Some local elected officials do not want you to vote on this constitutional amendment because they do not want limits on taxes or structural changes to our property tax system. For example, the City Council and Mayor in York recently voted to oppose LR 8CA. This is not surprising. Local governments have opposed limits on their own ability to tax and spend for years. You should expect to see property tax-funded local government officials mobilize to try and stop property tax relief and this constitutional amendment from going to a vote of the people.

While controlling spending to deliver tax relief may seem like common sense, some Senators and special interests who do not want to control the growth of government are taking a different approach to tax policy in the Legislature. This year, several bills in the Legislature that claim to provide property tax relief actually raise taxes and would take more of your money. These bills propose to raise taxes on food, home remodeling, vehicle repairs, and haircuts among many other kinds of tax hikes. I oppose this approach. Taking more money away from you by raising taxes is not tax relief. It is a tax increase that will grow government, and property taxes will continue to go up without limits. I will work with Senators to stop these attempts to raise your taxes and spend more of your money.

This is not the first time the Legislature has tried this kind of failed approach. In 1985, the Legislature passed, and Governor Bob Kerrey signed, a sales tax increase to offset some property taxes. The people of Nebraska overwhelmingly repealed this tax increase in the 1986 election. In 1990, the Legislature raised the sales and income taxes and directed it to local governments in the name of property tax relief. Within two years, property taxes soared again. Nebraska would be wise to avoid repeating the mistakes of the past. Property taxes continue to go up because there is no limit on how much local government can take from you.

Limiting tax increases will protect taxpayers from steep increases and force local governments to make the case to taxpayers when they believe their operations require additional resources. If you want the chance to vote on LR 8CA, I hope you will contact your Senator and let them know. You will find all their contact information at www.NebraskaLegislature.gov. If you have questions on other matters, you are welcome to write me at pete.ricketts@nebraska.gov or call 402-471-2244.

Pete Ricketts is the governor of Nebraska.

Subscribe to Breaking News

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.